Detouring Around The Cape Of Good Hope

Rerouting tankers around the Cape of Good Hope due to Red Sea attacks can add nearly a million dollars per voyage while also doubling transit time, according to LSEG Shipping Research, says an article published on gcaptain website.

Summary

• Rerouting tankers around the Cape of Good Hope due to Red Sea attacks can add nearly a million dollars per voyage and double the transit time.
• Each voyage involving the rerouting of an Aframax tanker from Asia to NW Europe adds nearly a million dollars in incremental costs.
• The additional expenses incurred during the detour primarily stem from a significant increase in fuel costs.
• Aframax tankers, which are vital for transporting both refined products and crude oil, occupy a substantial portion of the global tanker fleet.
• The rise in Houthi attacks on commercial vessels has led to a notable reduction in transits through the Suez Canal.
• Daily containership traffic in the Red Sea has witnessed a significant decline, particularly for larger vessels.

Detour Impact On Tanker Voyages

Rerouting tankers to circumvent the Cape of Good Hope due to heightened security risks in the Red Sea comes at a substantial cost. According to a report from LSEG Shipping Research, a division of the London Stock Exchange Group, each voyage involving the rerouting of an Aframax tanker from Asia to NW Europe adds nearly a million dollars in incremental costs. This detour also doubles the transit time from 16 to 32 days.

Financial Ramifications, Cost Breakdown

The additional expenses incurred during the detour primarily stem from a significant increase in fuel costs. The report outlines that the total costs for an Aframax tanker surge by 110% due to the rerouting, while larger container vessels experience a 35% increase for voyages between Asia and NW Europe.

Aframax Tankers, Crucial Players In Global Shipping

Aframax tankers, vital for transporting both refined products and crude oil, occupy a substantial portion of the global tanker fleet. With a deadweight tonnage ranging between 80,000 and 120,000, these vessels play a pivotal role in global shipping operations.

Impact Of Red Sea Incidents, Decline In Suez Canal Transits

The rise in Houthi attacks on commercial vessels has led to a notable reduction in transits through the Suez Canal. LSEG Shipping Research reports a 12.6% drop in average monthly transits from June to November 2023, further plummeting to 32.6% by January 22, 2024. This decline underscores the far-reaching consequences of security challenges in the region.

Container Shipping Struggles, Sharp Decline In Red Sea Traffic

Daily containership traffic in the Red Sea has witnessed a significant decline, particularly for larger vessels. The report indicates a nearly 60% drop since mid-December, with larger container vessels experiencing an over 80% reduction in transits. This trend highlights the severe impact on container shipping, necessitating strategic adjustments in response to security concerns.

Security Measures, AIS Broadcasts And Deterrence Messages

Despite the challenges, vessels still choosing to transit through the Red Sea are adopting additional security measures. The use of AIS (Automatic Identification System) for broadcasting deterrence messages, coupled with adherence to standard security protocols, reflects the maritime industry’s efforts to navigate the heightened risks effectively.

Global Trade Implications, Suez Canal And Red Sea Significance

Fabrice Maille, Global Head of Shipping at LSEG, emphasizes the pivotal role of the Suez Canal and the Red Sea in global trade. The ongoing conflict and security issues underscore the critical importance of these waterways, reminiscent of the challenges posed by the Ever Given grounding incident in 2021.

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Source: gcaptain

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